UNITED STATES SECURITIES EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q - ----------------------------------------------------------------- [X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended August 31, 2001 - ----------------------------------------------------------------- ANYTHING2SHIP, INC. ---------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 22-3642435 -------- ------------ (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) - ---------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number -------------- Check here whether the issuer (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _____ No_______ As of August 31, 2001, the following shares of the Registrant's common stock were issued and outstanding: 12,500,000 shares of voting common stock INDEX PART I - FINANCIAL INFORMATION Item 1. Financial Statements . . . . . . . . . . . . . . . . .3 CONDENSED CONSOLIDATED BALANCE SHEET . . . . . . . . .4 CONDENSED CONSOLIDATED INCOME STATEMENT. . . . . . . .5 STATEMENT OF CASH FLOWS. . . . . . . . . . . . . . . .6 Note 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES. . . . . . . . . . . . .8 Note 2. USE OF OFFICE SPACE. . . . . . . . . . . . .8 Note 3. EARNINGS PER SHARE . . . . . . . . . . . . .8 Note 4. LIQUIDITY . . . . . . . . . . . . . . . . . 9 Note 5. CONTRIBUTED SERVICES . . . . . . . . . . . .9 Note 6. SUBSEQUENT EVENTS . . . . . . . . . . . . . 9 Item 2. Management's Discussion And Analysis or Plan of Operations. . . . . . . . . . . . . . . . . . . . . .11 PART II - OTHER INFORMATION Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 15 Item 2. Changes in Securities. . . . . . . . . . . . . . . . 15 Item 3. Defaults upon Senior Securities. . . . . . . . . . . 15 Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . 15 Item 5. Other information. . . . . . . . . . . . . . . . . . 15 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 15 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 16 PART I - FINANCIAL INFORMATION To the Board of Directors of Anything2Ship, Inc. We have reviewed the accompanying balance sheet of Anything2Ship, Inc.,(a development stage company) as of August 31, 2001 and the related statements of operations and accumulated deficit, and cash flows for the three months then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Anything2Ship Inc. A review consists principally of inquiries of Company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. Graf Repetti & Co., LLP Dated: New York, New York January 24, 2002 ANYTHING2SHIP, INC. (A Developmental Stage Company) CONDENSED CONSOLIDATED BALANCE SHEET As Of As Of August 31, 2001 Feb. 28, 2001 (Unaudited) (Audited) -------------------------------- ASSETS Current Assets Cash $3 $0 Fixed Assets - Note 6 212,699 ---------- ---------- TOTAL ASSETS $212,702 $0 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accrued Expenses $42,425 $33,850 Lease payable - IOS Capital - Note 7 3,632 - Lucent Tech - Note 8 8,940 - Note payable - Criterion Management Services Limited - Note 9 138,642 - ----------- ---------- Total Current Liabilities $193,639 $33,850 LONG TERM LIABILITIES Lease payable - IOS Capital - Note 7 6,398 - Lucent Tech - Note 8 5,483 - Note payable - Criterion Management Services Limited - Note 9 49,814 - ----------- ---------- Total Long Term Liabilities $ 62,235 - Other Liabilities Loan Payable - Glen Investments Ltd - 28,950 Astride Property Holdings Ltd - Note 10 32,702 - RLI Capital Limited - Note 11 120,502 - ---------- ---------- Total Other Liabilities 153,204 28,950 ---------- ---------- Total Liabilities 409,078 $62,800 Stockholders' Equity Common Stock, $.001 par value, Authorized 25,000.000 Shares; Issued and Outstanding 12,500,000 Shares 12,500 Issued and Outstanding 6,000,000 shares as of Feb. 28, 2001 6,000 Additional Paid in Capital 168,853 144,050 Deficit Accumulated During the Development Stage (377,729) (212,850) ---------- ---------- Total Shareholders' Deficit (196,376) (62,800) ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $212,702 $ 0 ========== ========== The accompanying notes and accountant's report are an integral part of these financial statements. ANYTHING2SHIP, INC. (A Developmental Stage Company) CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS) For the 3 Mos Ended For the 3 Mos Ended August 31 May 31 2001 2000 2001 2000 -------------------------------------------- TOTAL REVENUES: $ 0 $ 0 $ 0 $ 0 OPERATING EXPENSES: Accounting 1,750 1,750 3,000 1,500 Legal 3,354 2,500 4,000 2,500 Rent Expense 15,047 600 600 600 Filing Fee 58 12 13 13 Contributed Services 15,000 15,000 15,000 15,000 Interest 5,330 - - - Telephone 6,439 - - - Utilities 3,084 - - - Consulting 87,190 - - - Insurance 998 - - - Office Expense 3,157 - - - Depreciation Expense 859 - - - -------------------------------------------- Total Operating Expense 142,266 19,862 22,613 19,863 -------------------------------------------- Net Loss (142,266) (19,862) (22,613) (19,863) -------------------------------------------- Accumulated Deficit - Beginning of Period (235,463) (144,763) (212,850) (124,900) -------------------------------------------- Accumulated Deficit - End of Period (377,729) (164,625) (235,463) (144,763) -------------------------------------------- Net Loss per Share $ (0.01) $ (0.00) $ (0.09) $ (0.00) ============================================ Weighted Average No. Of Shares Outstanding 12,500,000 6,000,000 2,619,555 6,000,000 The accompanying notes and accountant's report are an integral part of these financial statements. ANYTHING2SHIP, INC. (A Developmental Stage Company) For the 3 mos For the 3 mos Ended Ended to to August 31, 2001 August 31, 2000 ------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $(142,266) $(19,862) Adjustments to Reconcile Net Loss to Net Cash Used in operating Activities: Depreciation 859 - Additional paid in capital contributed by shareholders for: Rent 600 600 Contributed Services 15,000 15,000 Changes in Assets and Liabilities Increase in Accrued Expenses 5,162 4,262 ------------------------------- Total Adjustments 21,621 19,862 Net Cash Used in Operating Activities (120,645) - ------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in loan payable - Glen Investments Ltd. (32,450) - Increase in loan payable - Astride Property Holdings Ltd. 32,702 - IOS Capital 10,571 - Lucent Tech 14,423 - Criterion Management Service 188,456 - RLI Capital Limited 120,502 - ------------------------------- Net Cash Provided by Financing Activities 334,204 - ------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Payment for purchase of business equipment (213,559) - ------------------------------- Net Cash Used by Investing Activities (213,559) - ------------------------------- Net Change in Cash - - Cash - Beginning 3 - ------------------------------- Cash - Ending $ 3 $ - =============================== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash Paid During the Period for: Interest Expense 0 0 Corporate Taxes 0 0 The accompanying notes and accountant's report are an integral part of these financial statements. ANYTHINGS2SHIP INC. NOTES TO FINANCIAL STATEMENTS August 31, 2001 NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES A. Description of Company Anything2Ship Inc.,("the Company") is a for-profit corporation, incorporated under the laws of the State of Delaware on December 31, 1996 under the name MCC Catering Inc. The Company is a developmental stage company. The Company's principal objective was to develop a chain of "fast food" restaurants in the United Kingdom. In connection wit the business combination described in Note 1(f), the Company changed its objective to focus on the development of a digital technology platform to service the shipping industry. On August 31, 2001, the Company changed its name to Anything2Ship, Inc. B. Basis of Presentation Financial statements are prepared on the accrual basis of accounting. Accordingly, revenue is recognized when earned and expenses when incurred. C. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates. Significant estimates in the financial statements include the assumption that the Company will continue as a going concern. See Note 4. D. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term investments with maturity of three months or less to be cash equivalents. E. Consolidation Policy The accompanying consolidated financial statements include the accounts of the Company and all of its wholly owned and majority owned subsidiaries. There were no inter-company transaction to eliminate in consolidation. F. Purchase Agreement On May 29, 2001, the Company entered into an agreement whereby it agreed to be purchased by AutoFirst Limited, a company incorporated under the laws of the United Kingdom. AutoFirst Limited is a development stage company with $3 of assets and no liabilities as of May 29, 2001. The agreement called for a one- for 2.5 reverse split of Anything2Ship Inc.'s currently outstanding shares resulting in 2,400,000 outstanding. The financial statements as presented reflected the stock split. Anything2Ship Inc., then issued 12,500,00 post-reverse split shares with a par value of $12,500 to the shareholders of AutoFirst Limited and others in exchange for 100% of the issued and outstanding stock of AutoFirst Limited. Anything2ship accounted for the purchase agreement transaction as a capital transaction rather than a business combination. Additional paid in capital was reduced for the $12,500 par value of the stock. Anything2Ship issued in exchange for the outstanding stock of AutoFirst. Anything2Ship recorded AutoFirst's cash of $3 as its own assets. No goodwill or other intangible asset was recorded. Upon consummation of the transaction, the prior historic financial statements of the new entity reflected AutoFirst's historic financial statements. The Company is known as Anything2Ship, Inc. Although Anything2Ship is the legal acquirer of AutoFirst, AutoFirst is the acquirer for accounting purposes because the former shareholders of AutoFirst hold 81% of the total shares of Anything2Ship, and the former shareholders of Anything2Ship hold 19% of the total shares immediately after the acquisition. Thus, the former shareholders of AutoFirst have control of the merged entity. g) Furniture, fixtures, equipment and automobile are recorded at cost. Fixed assets are depreciated on a straight line or accelerated method at rates dependent on the type of asset. NOTE 2 - USE OF OFFICE SPACE The Company uses 250 square feet of space for its executive offices at City Tower, 40 Basinghall Street, London, UK which it receives from one of its shareholders at no cost. The fair market value of this office is $200 per month, which is reflected as an expense with a corresponding credit to additional paid-in capital. The Company also leased office space in Stamford, Connecticut for $14,448 for the three months ended August 31, 2001. See Note 13. NOTE 3 - EARNINGS PER SHARE Net Loss Per Share $ (0.01) NOTE 4 - LIQUIDITY The Company's viability as a going concern is dependent upon raising additional capital, and ultimately, having net income. The Company's limited operating history, including its losses and no revenues, primarily reflect the operations of its early stage. As a result, the Company had from time of inception to August 31, 2001 no revenue and a net loss from operations of $(377,729). As of August 31, 2001, the Company had a net capital deficiency of $(196,376). The Company requires additional capital principally to meet its costs for the implementation of its business plan, for general and administrative expenses and to fund costs associated with the start up of its fast food restaurants. It is not anticipated that the Company will be able to meet its financial obligations through internal net revenue in the foreseeable future. Anything2Ship Inc., does not have a working capital line of credit with any financial institution. Therefore, future sources of liquidity will be limited to the Company's ability to obtain additional debt or equity funding. See Notes 10 and 11. NOTE 5 - CONTRIBUTED SERVICES On March 1, 1999 two of the Company's officers began rendering services on behalf of the company at no cost. The fair market value is $2,500 per officer per month. Each amount is reflected as an expense with a corresponding credit to additional paid in capital. NOTE 6 - FIXED ASSETS Fixed Assets consist of the following: Accumulated Cost Depreciation Net ----------------------------------- Computer hardware and software $184,967 $ - $184,967 Equipment 28,591 859 27,732 ------------------------------------ Total 213,558 859 212,699 Depreciation on the computer hardware and software and some of the equipment will begin when it is placed in service. NOTE 7 - LEASE PAYABLE - IOS CAPITAL On June 17, 2001, the Company entered into an agreement to lease equipment. The agreement calls for 36 monthly payments of $350, including principal and interest. The equipment is valued at $12,019 on the balance sheet. Accumulated depreciation on the equipment is $859 as of August 31, 2001. The aggregate amount of required principal payments at August 31, 2001 is as follows: For Year Ending August 31 2002 $ 3,632 2003 3,870 2004 3,068 Total $ 10,570 NOTE 8 - LEASE PAYABLE - LUCENT TECH On June 17, 2001, the Company entered into an agreement to lease equipment. The agreement calls for 22 monthly payments of $800, including principal and interest. The equipment is valued at $16,573 on the balance sheet. Accumulated depreciation on the equipment is $0 as of August 31, 2001. The aggregate amount of required principal payments at August 31, 2001 is as follows: For Year Ending August 31 2002 $ 8,940 2003 5,483 Total $ 14,423 NOTE 9 - NOTE PAYABLE - CRITERION MANAGEMENT SERVICES LIMITED On June 17, 2001, the Company entered into an agreement to purchase computer hardware and software. The agreement calls for 4 payments of $50,000, including principal and interest. The agreement is evidenced by a note. $50,000 is due on December 17, 2001 and three installments of $50,000 each are due 90, 180 and 270 days after the first installment. The equipment is valued at $184,967 on the balance sheet. Accumulated depreciation on the equipment is $0 as of August 31, 2001. The aggregate amount of required principal payments at August 31, 2001 is as follows: For Year Ending August 31 2002 $ 138,642 2003 49,814 Total $ 188,456 10. RELATED PARTY TRANSACTION AND LOAN PAYABLE - ASTRIDE PROPERTY HOLDINGS LTD. Astride Property Holdings Ltd. is a shareholder of Anything2Ship, Inc. Astride Property Holdings Ltd. has agreed to supply funds up to $75,000 to Anything2Ship to cover Anything2ship's financial obligations. Subsequent to that, there is no guarantee or assurance that Astride Property Holdings Ltd. will advance Anything2Ship any further funds or that Anything2Ship will be able to raise any additional funds to meet its financial obligations. Anything2Ship anticipates that its capital resources, as provided through its arrangement with Astride Property Holdings Ltd., will permit the company to maintain its current implemented operations for at least twelve (12) months. As of August 31, 2001, $32,702 was outstanding on this loan. The loan is not evidenced by a note. The informal agreement calls for no payment of interest. Anything2Ship intends to repay the loan out of any fundraising that it may carry out or when the Company achieves sustainable revenue. NOTE 11 - LOAN PAYABLE - RLI CAPITAL RLI Capital Limited has agreed to supply funds up to $200,000 to Anything2Ship to cover Anything2Ship's financial obligations. Subsequent to that, there is no guarantee or assurance that RLI Capital Limited will advance Anything2Ship any further funds or that Anything2Ship will be able to raise any additional funds to meet its financial obligations. Anything2Ship anticipates that its capital resources, as provided through its arrangement with RLI Capital Limited, will permit the company to maintain its current implemented operations for at least twelve (12) months. As of August 31, 2001, $120,502 was outstanding on this loan. The loan is not evidenced by a note which calls for interest of 6% per year to be added to the principal balance monthly. Anything2Ship intends to repay the loan out of any fundraising that it may carry out or when the Company achieves sustainable revenue. NOTE 12 - NON-CASH FINANCIAL TRANSACTIONS Non-cash financing transactions consisting of the cost of contributed services, rent and the related additional paid in capital contributed by shareholders have been in expenses and additional paid in capital, respectively, in accompanying financial statements at a value of $15,600. NOTE 13 - LEASE OF OFFICE SPACE On August 15, 2001 the Company entered into a new month to month lease agreement for office space in Westport, Connecticut beginning September 1, 2001. The rent will be $700 per month. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Anything2Ship Inc., ("A2S"), a development stage company, was organized in January 1997 as MCC Catering Inc., under the laws of the State of Delaware, having the stated purpose of engaging in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. A2S has limited operating history upon which investors can rely upon in evaluating the company. A2S was originally formed to provide "fast food" outlets throughout cities in the United Kingdom. After unsuccessful attempts to raise capital to develop the company's business plan management decided that the company's business plan was not feasible and as such looked for an acquisition or merger candidate that could develop a viable business and provide value for shareholders. On May 29, 2001, the Company acquired Autofirst Limited, a UK corporation with the stated aim of developing and acquiring technology to develop a digital platform to match shippers with hauliers. As part of the transaction the company effectuated a 2.5 to one reverse split of the company's outstanding shares of common stock and issued 10,100,000 shares of common stock to the shareholders of Autofirst Limited. This resulted with the company having outstanding 12,500,000 shares of issued and outstanding common stock as at 31st May 2001. On May 31, 2001 the company changed its name to Anything2Ship Inc. The shareholders of Autofirst Limited assumed control of the Company as at 29th May 2001. Anything2ship Inc., (hereinafter "A2S") is a web enabled freight management service primarily focused on the spot freight marketplace. Its business is initially being launched in the UK, and is expected to subsequently expanding throughout the European Union countries. In the vent such an expansion is successful, the company will attempt to continue with an expansion to the United States. There is no guarantee that A2S' plans shall be successful or that it shall become profitable. Investors are alerted that there exist significant risks associated with investment in A2S. A2S has created a new market dynamic that virtually eliminates the significant inefficiency in the buying and selling of freight services between spot buyers and shippers (Small to Medium Enterprises-"SME's") of freight over 150 lbs and Carriers seeking to fill empty space backhauls. By utilizing the Internet, A2S has codified in time and place terms a random marketplace by matching in real-time the supply and demand needs of an extensive spot shipper market. Plagued by underutilized trucking capacity, carriers are currently running 36% empty in the UK and higher in Europe. The logistics market in the UK is over $150 billion, but with the planned expansion into Europe the total market exceeds $ 1.5 trillion, which is fragmented into thousands of companies. The top 15 UK Carriers account for less than 6% of the market; A2S's target market is 2.7 million of the 3.7 million UK SME's (Details: Appendix 1). To achieve its Year 3 goal, A2S needs to capture 1% of this SME target market, or 27,000 shippers. The growth in the road haulage market will be characterized by wider international coverage, an increasing reliance on Information Technology (IT), and growth in rationalization as larger companies target acquisitions in order to increase their geographic and product coverage. In addition, the industry will remain burdened by overcapacity that will further intensify competition and create demand for greater efficiency, capacity management, and cost control. A2S will seek to provide a unique freight management service that satisfies the unmet needs of buyers and sellers of spot freight. It will seek to accommodate the small to medium size businesses (SME's) who are plagued by the frustration of getting competitive quotes, prompt service and efficient accounting reconciliation. Conversely, A2S will seek to help carriers optimize capacity by reaching SME's that have been inherently too expensive and inefficient to prospect. A2S seeks to provide the SME buyer of spot freight with real-time quotes from Carriers with underutilized capacity by their postcode preferences, thus giving shippers a new level of competitive pricing, service, and efficiency within the entire transaction process. A2S also seeks to provide Carriers with new revenue sources from an untapped market, thereby increasing load optimization and margins, while reducing costs and credit risk. A2S shall focus on the 150lbs/68 kilos plus spot freight marketplace, which is approximately 5 times the value of the FedEx/UPS market in the US. This market is highly fragmented and therefore poorly served. A2S will seek to initially serve the UK SME market by creating efficient, automated, cost effective service in place of a manually intensive, time consuming and fragmented process. No recognized brand currently serves this market. A2S consolidates the SME marketplace by creating "critical mass" for the Seller (Carrier) looking to optimize capacity and reduce the average 36% running empty capacity. The A2S system perfects a disorganized supply and demand marketplace. A2S utilizes the existing physical infrastructure of the marketplace by using digital technology to match buyers and sellers. Thus A2S will seek to derive revenues from buyer and seller by taking a commission when a transaction is completed, this creates dependency driven by time and cost savings. Additionally, A2S expects to have low fixed costs, all of the above are core factors that also exist in the eBay model. A2S intends to charge a minimum of 2% from the Carrier and marks up the Carrier Quote by 15% to the shipper. As A2S fills excess capacity, which is otherwise unused, it will create lower and more competitive pricing for A2S customers. The product is an efficient and cost effective electronic system that allows shippers to get competitive real-time quotes matched to carriers under utilized capacity by zip code preferences. A2S electronically arranges all documents, payments, bills of lading, tracking and delivery notices. This approach retains and maintains existing purchasing behavior but eliminates phone and fax practice. This is achieved in part through the support of Oracle 11i Financials, which provide a powerful web hub of accounting, customer service, and reporting tools. This is in conjunction with the Oracle Database which is the industry standard database platform. In addition, the Company is integrating a number of existing applications and platforms used by the Airline Industry, IRS and the US Postal service. Reliability, scalability and the elimination of reliance on proprietary protocols and standards will be insured. PART II - OTHER INFORMATION Item 1. Legal Proceedings There are currently no pending legal proceedings against the company. Item 2. Changes in Securities On May 29, 2001, the Company acquired Autofirst Limited, a UK corporation with the stated aim of developing and acquiring technology to develop a digital platform to match shippers with hauliers. As part of the transaction the company effectuated a 2.5 to one reverse split of the company's outstanding shares of common stock and issued 10,100,000 shares of common stock to the shareholders of Autofirst Limited. This resulted with the company having outstanding 12,500,000 shares of issued and outstanding common stock as at 31st May 2001. Item 3. Defaults upon Senior Securities There has been no default in the payment of principal, interest, sinking or purchase fund installment. Item 4. Submission of Matters to a Vote of Security Holders On May 29, 2001, the Company entered into an Acquisition Agreement with Autofirst Limited, ("Autofirst"), a company incorporated under the laws of the United Kingdom. Under the terms of the Agreement, the Company will undertake a 2.5 for 1 reverse split of its common stock. In consideration of the acquisition of all of the outstanding shares of common stock in Autofirst, the Company shall issue 10,100,000 shares of common stock to the shareholders of Autofirst in proportion to their percentage shareholding in Autofirst. The transaction and closing was approved by a majority of the shareholders of both companies. Subsequent to the closing of the transaction, control of the company shall pass to the shareholders of Autofirst. Item 5. Other information There is no other information to report which is material to the company's financial condition not previously reported. Item 6. Exhibits and Reports on Form 8-K The company on May 29, 2001 filed a report on Form 8-K which is incorporated by reference herein. SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. ANYTHING2SHIP INC. - ----------------------------------- (Registrant) Date: March 11, 2002 By: /s/ LINDEN BOYNE ---------------- Director